Columbus Leaders Hope Tax Break Changes Lead To More Mixed-Income Neighborhoods

Jan 30, 2018

The city of Columbus is overhauling its tax incentive policies to focus on increasing the availability of affordable housing in thriving neighborhoods like the Short North.

In 2016, the Department of Development commissioned a consulting firm to study the city's use of tax incentives for real estate developers. In 2016 and 2017, City Council member Elizabeth Brown held four public hearings throughout the city to acquire feedback from residents.

Department Director Steve Schoeny says the city's new policy will accomplish four things: build mixed-income neighborhoods, change the economics of development in Columbus, provide more transparency, and raise wages.

“We are going to require that 20 percent of the units and multi-family projects in fast-growing neighborhoods like the Short North are dedicated and available to working families and households making below 100 percent or 80 percent of the area median income,” Schoeny says.  

Area median income is a figure determined by the U.S. Housing and Urban Development. It is not specific to each Columbus neighborhood, but rather determined by the median income of about 10 counties including and surrounding Franklin, according to Schoeny.

The city also announced it will not provide abatements to job creators paying less than $15 an hour. That number was previously $12 an hour.

The city has not changed the existing tax incentives map, but will apply its new policies going forward.

“Because what's happening in the Short North and other neighborhoods that are particularly hot right now is working class people have been forced out of them,” Mayor Andrew Ginther said Monday. “And what we've seen in great cities across the country is working class people who've lived in neighborhoods for long periods of time, when great economic growth and investment takes place, they are displaced.”

The new tax abatement policies will not apply to Columbus’ historic neighborhoods.

“What we have in the policy is we have a procedure for looking at expanding our abatement areas," Schoeny says. "We recognize there are areas in our city that may want abatement that are not covered by abatement. So that's something we're going to look at."

If City Council approves the legislation, policies will take effect this summer.

A study released last year found that generous tax abatements were not necessary to spur certain types of residential development in the Short North.

The study also found that the Hilltop, Near Eastside and Linden required abatements plus additional subsidies. Data show slow economic growth and the low cost of rent in those areas makes it harder to attract market rate developments.